Signalling between cells regulates many aspects of their behaviour. Although much work has focused on proteins, bioactive lipids also have potent effects on cells. In Drosophila lipid signalling is implicated in guiding migrating germ cells. The germ cells, which later will become sperm or eggs, undergo a stereotyped migration during embryogenesis to reach the gonad. Enzymes of the lipid phosphate phosphatase (LPP) class are expressed in regions of the embryo that germ cells normally avoid and serve to repel germ cells and regulate their survival. Later in embryonic development these enzymes are also expressed in a subset of Drosophila heart cells and are required for correct development of the heart. These data suggest that extracellular lipids are regulating the behaviour of both germ and heart cells. The aims of this project are several-fold: Firstly to discover the extracelluar lipid that is responsible for the behaviour of these two cell types. Secondly to discern it’s mode of action, in particular what are the molecular players that are necessary to detect this lipid and how they link to known pathways that regulate cell migration. The final goal is to find out if these roles are conserved outside of Drosophila. This research is important because the LPP enzymes are highly conserved in evolution but a full understanding of their function in any developmental paradigm is lacking. Secondly a number of in vitro substrate of LPPs have been shown to have important signalling roles. For example sphingosine 1-phosphate acts extracellularly to influence lymphocyte circulation and endothelial cell migration during vascular development in mice. To what extent LPPs modulate these activities is unclear. Information gained by studying lipids in model organisms will lead to a better understanding of the developmental processes of heart formation and germ cell migration and will identify new bioactive lipids that may have more widespread signalling functions.